SHARES in Wuhan Iron and Steel Co surged after the major Chinese steel mill announced a CNY 15 billion (USD 2.41 billion) private placement to acquire mining assets from its parent.
According to a filing to the Shanghai Stock Exchange, the company plans to issue as many as 4.2 billion A shares to up to 10 shareholders, including its state owned parent, Wuhan Iron and Steel Group.
Wuhan Steel shares rose as much as 10% on November 27th 2012 before abating and closing at CNY 2.56 a gain 5.35% while the Shanghai Composite Index was down 1.3%. Trading in Wuhan Steel shares had been suspended since October 30 pending the announcement.
The company said the proceeds will be used to buy its parent's iron ore assets in China, Canada, Brazil, Australia and Liberia, as part of efforts to increase the self-sufficiency rate of the key steel making ingredient.
